Gross-Up Calculator 2026

How a Gross-Up Works

A gross-up is a reverse paycheck calculation. Start from the net amount you want the employee to keep and work backward to find the gross pay that, after all withholding, lands on that exact number. The puzzle is that adding more gross also adds more tax, which in turn needs more gross. When the withholding rates are flat, the math collapses to a single formula:

Gross Pay = Desired Net ÷ (1 − Combined Tax Rate)

For a $1,000 net in Texas using the supplemental method with FICA on, the combined withholding rate is 22% federal + 0% state + 6.2% Social Security + 1.45% Medicare = 29.65%. The formula gives $1,000 / (1 − 0.2965) = $1,421.47. Federal withholding takes $312.72, SS takes $88.13, Medicare takes $20.61, and the employee ends up with exactly $1,000 in the bank. The gross-up factor is 1.42×.

The calculator handles the extra wrinkles automatically. When a gross-up crosses the Social Security wage base ($184,500 in 2026), the Additional Medicare threshold ($200,000 in employer wages), or the $1,000,000 mandatory-37% supplemental-wages cap, it drops out of the closed form and iterates a few Newton rescale passes to hit your desired net within half a cent.

Common Use Cases

• Signing and referral bonuses. A gross-up makes the headline number the actual take-home, so a "$5,000 sign-on bonus" really puts $5,000 in the new hire's bank.
• Relocation reimbursements. Since the 2017 TCJA, most employer-paid moving expenses are fully taxable. Gross-ups are near-universal on relocation packages to cover the resulting federal, state, and FICA hit.
• Severance payments. In jurisdictions and contracts where severance is specified as net, the employer grosses up so the departing employee receives the agreed amount after withholding.
• Non-cash awards. Prizes, gift cards, event tickets, and similar fringe benefits are taxable at fair market value. Employers often gross up the imputed income to spare the employee a surprise at year-end.
• Class-action or settlement payments that specify a net figure.
• Foreign-assignment tax equalization programs, where the employer neutralizes host-country tax differences.

Percentage Method vs Aggregate Method

Two IRS-sanctioned ways for an employer to withhold federal tax on supplemental wages (bonuses, commissions, severance) are outlined in Publication 15-T:

• Percentage (flat) method. The payment is issued on its own check and withheld at a flat 22% federal, plus any published state supplemental rate, plus FICA. Simple, predictable, and the dominant approach for one-off payments. For supplemental wages above $1,000,000 in a calendar year, the excess is withheld at a mandatory 37%.
• Aggregate method. The payment is combined with regular wages on a single check. The employer annualizes the combined total, runs it through the standard federal brackets, subtracts the tax already withheld on the salary, and withholds the difference from the bonus. Aggregate withholding usually comes out higher than flat because it uses the marginal bracket, not a fixed 22%.

Your employer picks the method, not you. Still, knowing which one is in play makes it easier to estimate take-home. Toggle the Pay Type above to see both approaches side by side. For a forward (gross → net) view of the same math, try our Bonus Tax Calculator.

Tax Implications at Year-End

Withholding is not your final tax bill. A $1,421.47 gross-up adds $1,421.47 to your W-2 Box 1 wages and $1,421.47 to Box 3 and Box 5 for FICA. At year-end, all of it rolls into your total taxable income and gets taxed at your actual marginal rate on Form 1040.

If your marginal federal bracket is below 22% (say 12%), a 22% flat withholding over-withholds, and you'll see the excess refunded. If your bracket is above 22% (24%, 32%, and higher), the flat method under-withholds, and you may owe the difference at filing time. States run the same way. California's 10.23% supplemental rate often over-withholds on bonuses, while states without a published supplemental rate apply regular bracket tables that more closely match the final bill. For detail on the FICA side, see the FICA Tax Calculator.

Gross-Up Reference Table (TX / No State Tax)

Gross pay required to deliver each net amount, assuming the 22% federal supplemental rate, 7.65% FICA, and no state income tax (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming). Combined withholding: 29.65%. Gross-up factor: 1.42×.

Higher-tax states push the factor up. The same $1,000 net in California (10.23% supplemental rate) requires a $1,663.34 gross (1.66×); in New York (11.70%), $1,705.03 (1.71×). Use the state selector above to see your state's number.